Universal Health Services, Inc. Reports 2010 First Quarter Financial Results
Consolidated Results of Operations
KING OF PRUSSIA, Pa., April 26 /PRNewswire-FirstCall/ -- Universal Health Services, Inc. (NYSE: UHS) announced today that its reported net income attributable to UHS was $71.8 million, or an increase of 7% to $.73 per diluted share, during the first quarter of 2010 as compared to $67.5 million, or $.68 per diluted share, during the comparable prior year quarter.
Net revenues increased 3% to $1.35 billion during the first quarter of 2010 as compared to $1.31 billion during the first quarter of 2009. The operating margin (net revenues less salaries, wages and benefits, other operating expenses, supplies expense and provision for doubtful accounts) increased to 15.7% during the first quarter of 2010 as compared to 15.6% during the first quarter of 2009.
Acute Care Services:
At our acute care hospitals owned during both periods ("same facility basis"), adjusted admissions (adjusted for outpatient activity) increased 1.8% while adjusted patient days increased 0.6% during the first quarter of 2010, as compared to the first quarter of 2009. Net revenues at these facilities increased 3.1% during the first quarter of 2010 as compared to the comparable quarter of the prior year. At these facilities, net revenue per adjusted admission increased 1.3% while net revenue per adjusted patient day increased 2.5% during the first quarter of 2010 as compared to the comparable quarter of the prior year. On a same facility basis, the operating margin at our acute care hospitals decreased to 16.1% during the first quarter of 2010 as compared to 17.6% during the first quarter of 2009.
We provide care to patients who meet certain financial or economic criteria without charge or at amounts substantially less than our established rates. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in net revenues or in accounts receivable, net. Our acute care hospitals provided charity care and uninsured discounts, based on charges at established rates, amounting to $176 million and $158 million during the three-month periods ended March 31, 2010 and 2009, respectively.
Behavioral Health Care Services:
At our behavioral health care facilities, on a same facility basis, adjusted admissions increased 3.8% and adjusted patient days increased 3.9% during the first quarter of 2010 as compared to the first quarter of 2009. Net revenues at these facilities increased 6.7% during the first quarter of 2010 as compared to the comparable quarter in the prior year. At these facilities, net revenue per adjusted admission increased 2.8% while net revenue per adjusted patient day increased 2.7% during the first quarter of 2010 over the comparable prior year quarter. The operating margin at our behavioral health care facilities owned during both periods increased to 26.1% during the first quarter of 2010 as compared to 24.6% during the first quarter of 2009.
Conference Call Information:
We will hold a conference call for investors and analysts at 9:00 a.m. eastern time on April 27, 2010. The dial-in number is 1-877-648-7971. A digital recording of the conference call will be available two hours after the completion of the conference call on April 27, 2010 and will continue through midnight on May 11, 2010. The recording can be accessed by calling 1-800-642-1687 and entering the conference ID number 68231632. This call will also be available live over the internet at our web site at www.uhsinc.com. The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents at www.streetevents.com.
General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:
Universal Health Services, Inc. ("UHS") is one of the nation's largest hospital companies operating, through its subsidiaries, acute care hospitals, behavioral healthcare facilities and ambulatory centers located throughout the United States and Puerto Rico. UHS acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE: UHT). For additional information on the Company, visit our web site: http://www.uhsinc.com.
This press release contains forward-looking statements based on current management expectations. Numerous factors, including those disclosed herein, those related to healthcare industry trends and those detailed in our filings with the Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7-Forward-Looking Statements and Risk Factors in our Form 10-K for the year ended December 31, 2009), may cause the results to differ materially from those anticipated in the forward-looking statements. Many of the factors that will determine our future results are beyond our capability to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially. Readers should not place undue reliance on such forward-looking statements which reflect management's view only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
We believe that operating income, operating margin, adjusted net income attributable to UHS, adjusted net income attributable to UHS per diluted share and earnings before interest, taxes, depreciation and amortization ("EBITDA"), which are non-GAAP financial measures ("GAAP" is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of items that are nonrecurring or non-operational in nature including items such as, but not limited to, gains on sales of assets and businesses, reserves for settlements, legal judgments and lawsuits and other amounts that may be reflected in the current or prior year financial statements that relate to prior periods. To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended December 31, 2009. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability. Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies. Investors are encouraged to use GAAP measures when evaluating our financial performance.
Universal Health Services, Inc. Consolidated Statements of Income (in thousands, except per share amounts) (unaudited) |
||||
Three months |
||||
ended March 31, |
||||
2010 |
2009 |
|||
Net revenues |
$1,347,153 |
$1,312,419 |
||
Operating charges: |
||||
Salaries, wages and benefits |
578,926 |
541,297 |
||
Other operating expenses |
247,028 |
273,221 |
||
Supplies expense |
183,816 |
173,967 |
||
Provision for doubtful accounts |
125,390 |
118,978 |
||
Depreciation and amortization |
53,511 |
51,134 |
||
Lease and rental expense |
17,934 |
17,072 |
||
1,206,605 |
1,175,669 |
|||
Income from operations |
140,548 |
136,750 |
||
Interest expense, net |
12,377 |
12,638 |
||
Income before income taxes |
128,171 |
124,112 |
||
Provision for income taxes |
45,409 |
42,078 |
||
Net income |
82,762 |
82,034 |
||
Less: Net income attributable to |
||||
noncontrolling interests |
10,943 |
14,493 |
||
Net income attributable to UHS |
$71,819 |
$67,541 |
||
Basic earnings per share attributable to UHS (a) |
$0.74 |
$0.68 |
||
Diluted earnings per share attributable to UHS (a) |
$0.73 |
$0.68 |
||
Universal Health Services, Inc. Footnotes to Consolidated Statements of Income (in thousands, except per share amounts) (unaudited) |
||||
Three months |
||||
ended March 31, |
||||
2010 |
2009 |
|||
(a) Earnings per share calculation: |
||||
Basic and diluted: |
||||
Net income attributable to UHS |
$71,819 |
$67,541 |
||
Less: Net income attributable to unvested restricted share grants |
(315) |
(314) |
||
Net income attributable to UHS - basic and diluted |
$71,504 |
$67,227 |
||
Weighted average number of common shares - basic |
96,539 |
98,412 |
||
Basic earnings per share attributable to UHS: |
$0.74 |
$0.68 |
||
Weighted average number of common shares |
96,539 |
98,412 |
||
Add: Other share equivalents |
911 |
- |
||
Weighted average number of common shares and equiv. - diluted |
97,450 |
98,412 |
||
Diluted earnings per share attributable to UHS: |
$0.73 |
$0.68 |
||
Universal Health Services, Inc. Schedule of Non-GAAP Supplemental Consolidated Statements of Income Information ("Supplemental Schedule") For the three months ended March 31, 2010 and 2009 (in thousands, except per share amounts) (unaudited) |
||||||||
Calculation of "EBITDA" |
||||||||
Three months ended |
Three months ended |
|||||||
March 31, 2010 |
March 31, 2009 |
|||||||
Calculation of "EBITDA" |
||||||||
Net revenues |
$1,347,153 |
100.0% |
$1,312,419 |
100.0% |
||||
Operating charges: |
||||||||
Salaries, wages and benefits |
578,926 |
43.0% |
541,297 |
41.2% |
||||
Other operating expenses |
247,028 |
18.3% |
273,221 |
20.8% |
||||
Supplies expense |
183,816 |
13.6% |
173,967 |
13.3% |
||||
Provision for doubtful accounts |
125,390 |
9.3% |
118,978 |
9.1% |
||||
1,135,160 |
84.3% |
1,107,463 |
84.4% |
|||||
Operating income/margin ("EBITDAR") |
211,993 |
15.7% |
204,956 |
15.6% |
||||
Lease and rental expense |
17,934 |
17,072 |
||||||
Net income attributable to noncontrolling interests |
10,943 |
14,493 |
||||||
Earnings before, depreciation and amortization, interest expense, and income taxes ("EBITDA") |
$183,116 |
$173,391 |
||||||
Universal Health Services, Inc. Condensed Consolidated Balance Sheets (in thousands, unaudited) |
||||||
March 31, |
December 31, |
|||||
2010 |
2009 |
|||||
Assets |
||||||
Current assets: |
||||||
Cash and cash equivalents |
$ |
6,865 |
$ |
9,180 |
||
Accounts receivable, net |
648,831 |
602,559 |
||||
Supplies |
83,822 |
84,272 |
||||
Other current assets |
36,863 |
27,270 |
||||
Deferred income taxes |
39,895 |
51,336 |
||||
Current assets held for sale |
21,580 |
21,580 |
||||
Total current assets |
837,856 |
796,197 |
||||
Property and equipment |
3,771,362 |
3,738,818 |
||||
Less: accumulated depreciation |
(1,467,874) |
(1,423,580) |
||||
2,303,488 |
2,315,238 |
|||||
Other assets: |
||||||
Goodwill |
733,626 |
732,685 |
||||
Deferred charges |
9,316 |
8,643 |
||||
Other |
115,025 |
111,700 |
||||
$ |
3,999,311 |
$ |
3,964,463 |
|||
Liabilities and Stockholders' Equity |
||||||
Current liabilities: |
||||||
Current maturities of long-term debt |
$ |
1,526 |
$ |
2,573 |
||
Accounts payable and accrued liabilities |
583,028 |
578,617 |
||||
Federal and state taxes |
25,716 |
1,627 |
||||
Total current liabilities |
610,270 |
582,817 |
||||
Other noncurrent liabilities |
367,747 |
375,580 |
||||
Long-term debt |
891,615 |
956,429 |
||||
Deferred income taxes |
63,125 |
60,091 |
||||
UHS common stockholders' equity |
1,821,755 |
1,751,071 |
||||
Noncontrolling interest |
244,799 |
238,475 |
||||
Total equity |
2,066,554 |
1,989,546 |
||||
$ |
3,999,311 |
$ |
3,964,463 |
|||
Universal Health Services, Inc. Consolidated Statements of Cash Flows (in thousands) (unaudited) |
||||
Three months |
||||
ended March 31, |
||||
2010 |
2009 |
|||
Cash Flows from Operating Activities: |
||||
Net income |
$82,762 |
$82,034 |
||
Adjustments to reconcile net income to net |
||||
cash provided by operating activities: |
||||
Depreciation & amortization |
53,511 |
51,134 |
||
Gain on sale of asset |
(1,848) |
- |
||
Stock-based compensation expense |
4,065 |
3,463 |
||
Changes in assets & liabilities, net of effects from |
||||
acquisitions and dispositions: |
||||
Accounts receivable |
(46,499) |
(44,894) |
||
Construction management and other receivable |
- |
17,477 |
||
Accrued interest |
8,357 |
10,491 |
||
Accrued and deferred income taxes |
37,380 |
28,062 |
||
Other working capital accounts |
(2,389) |
6,581 |
||
Other assets and deferred charges |
(4,231) |
(1,902) |
||
Other |
(4,164) |
(4,537) |
||
Accrued insurance expense, net of commercial premiums paid |
18,960 |
20,014 |
||
Payments made in settlement of self-insurance claims |
(10,187) |
(15,669) |
||
Net cash provided by operating activities |
135,717 |
152,254 |
||
Cash Flows from Investing Activities: |
||||
Property and equipment additions, net of disposals |
(62,576) |
(78,219) |
||
Proceeds received from sale of asset |
2,894 |
- |
||
Net cash used in investing activities |
(59,682) |
(78,219) |
||
Cash Flows from Financing Activities: |
||||
Reduction of long-term debt |
(68,363) |
(51,800) |
||
Repurchase of common shares |
(2,157) |
(14,725) |
||
Dividends paid |
(4,834) |
(3,962) |
||
Issuance of common stock |
1,627 |
667 |
||
Profit distributions to noncontrolling interests |
(4,623) |
(252) |
||
Net cash used in financing activities |
(78,350) |
(70,072) |
||
Increase (decrease) in cash and cash equivalents |
(2,315) |
3,963 |
||
Cash and cash equivalents, beginning of period |
9,180 |
5,460 |
||
Cash and cash equivalents, end of period |
$6,865 |
$9,423 |
||
Supplemental Disclosures of Cash Flow Information: |
||||
Interest paid |
$5,482 |
$3,966 |
||
Income taxes paid, net of refunds |
$6,732 |
$13,784 |
||
Universal Health Services, Inc. Supplemental Statistical Information (unaudited) |
||||||
% Change |
||||||
Quarter Ended |
||||||
Same Facility: |
3/31/2010 |
|||||
Acute Care Hospitals |
||||||
Revenues |
3.1% |
|||||
Adjusted Admissions |
1.8% |
|||||
Adjusted Patient Days |
0.6% |
|||||
Revenue Per Adjusted Admission |
1.3% |
|||||
Revenue Per Adjusted Patient Day |
2.5% |
|||||
Behavioral Health Hospitals |
||||||
Revenues |
6.7% |
|||||
Adjusted Admissions |
3.8% |
|||||
Adjusted Patient Days |
3.9% |
|||||
Revenue Per Adjusted Admission |
2.8% |
|||||
Revenue Per Adjusted Patient Day |
2.7% |
|||||
UHS Consolidated |
First Quarter Ended |
|||||
3/31/2010 |
3/31/2009 |
|||||
Revenues |
$1,347,153 |
$1,312,419 |
||||
EBITDA (1) |
$183,116 |
$173,391 |
||||
EBITDA Margin (1) |
13.6% |
13.2% |
||||
Cash Flow From Operations |
$135,717 |
$152,254 |
||||
Days Sales Outstanding |
43 |
45 |
||||
Capital Expenditures |
$62,576 |
$78,219 |
||||
Debt |
893,141 |
947,569 |
||||
UHS common stockholders' equity |
1,821,755 |
1,596,544 |
||||
Debt / Total Capitalization |
32.9% |
37.2% |
||||
Debt / EBITDA (2) |
1.29 |
1.64 |
||||
Debt / Cash From Operations (2) |
1.73 |
1.84 |
||||
Acute Care EBITDAR Margin (3) |
16.1% |
17.6% |
||||
Behavioral Health EBITDAR Margin (3) |
25.5% |
24.3% |
||||
(1) Net of noncontrolling interest |
||||||
(2) Latest 4 quarters |
||||||
(3) Before Corporate overhead allocation and noncontrolling interest |
||||||
UNIVERSAL HEALTH SERVICES, INC. SELECTED HOSPITAL STATISTICS MARCH 31, 2010 |
||||||||
AS REPORTED: |
||||||||
For the three months ended |
||||||||
Acute |
Behavioral Health |
|||||||
03/31/10 |
03/31/09 |
% |
03/31/10 |
03/31/09 |
% |
|||
Hospitals owned and leased |
21 |
21 |
0.0% |
82 |
81 |
1.2% |
||
Average licensed beds |
5,689 |
5,465 |
4.1% |
7,971 |
7,794 |
2.3% |
||
Patient days |
305,676 |
307,278 |
-0.5% |
538,750 |
512,934 |
5.0% |
||
Average daily census |
3,396.4 |
3,414.2 |
-0.5% |
5,986.1 |
5,699.3 |
5.0% |
||
Occupancy-licensed beds |
59.7% |
62.5% |
-4.4% |
75.1% |
73.1% |
2.7% |
||
Admissions |
68,638 |
68,198 |
0.6% |
36,357 |
33,961 |
7.1% |
||
Length of stay |
4.5 |
4.5 |
-1.2% |
14.8 |
15.1 |
-1.9% |
||
Inpatient revenue |
$2,783,431 |
$2,580,139 |
7.9% |
$544,781 |
$503,681 |
8.2% |
||
Outpatient revenue |
1,116,925 |
995,699 |
12.2% |
77,977 |
68,128 |
14.5% |
||
Total patient revenue |
3,900,356 |
3,575,838 |
9.1% |
622,758 |
571,809 |
8.9% |
||
Other revenue |
15,803 |
17,810 |
-11.3% |
8,408 |
7,909 |
6.3% |
||
Gross hospital revenue |
3,916,159 |
3,593,648 |
9.0% |
631,166 |
579,718 |
8.9% |
||
Total deductions |
2,926,848 |
2,633,799 |
11.1% |
281,984 |
257,565 |
9.5% |
||
Net hospital revenue |
$989,311 |
$959,849 |
3.1% |
$349,182 |
$322,153 |
8.4% |
||
SAME FACILITY: |
||||||||
Acute |
Behavioral Health (1) |
|||||||
03/31/10 |
03/31/09 |
% |
03/31/10 |
03/31/09 |
% |
|||
Hospitals owned and leased |
21 |
21 |
0.0% |
79 |
79 |
0.0% |
||
Average licensed beds |
5,689 |
5,465 |
4.1% |
7,735 |
7,642 |
1.2% |
||
Patient days |
305,676 |
307,278 |
-0.5% |
530,766 |
509,661 |
4.1% |
||
Average daily census |
3,396.4 |
3,414.2 |
-0.5% |
5,897.4 |
5,662.9 |
4.1% |
||
Occupancy-licensed beds |
59.7% |
62.5% |
-4.4% |
76.2% |
74.1% |
2.9% |
||
Admissions |
68,638 |
68,198 |
0.6% |
35,295 |
33,937 |
4.0% |
||
Length of stay |
4.5 |
4.5 |
-1.2% |
15.0 |
15.0 |
0.1% |
||
(1) Ascent, Centennial Peaks, Crescent Pines, The Hope Program and Springwoods Behavioral are excluded in both current and prior years. Coastal Behavioral is included in March 1st thru year to date. |
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SOURCE Universal Health Services, Inc.
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